Jobless claims in the US

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Michael_00005
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Jobless claims in the US

Post by Michael_00005 »

In a financial meeting some economic's people pointed out that our new unemployment claims numbers are going to make a huge jump next week. 3/23 - /3/27, maybe it comes out on Thursday.

Don't have time to research it now, but it might be this report: https://www.dol.gov/ui/data.pdf

Maybe someone else can comment on the report. Likely it will create a big dip in the US markets on that day.

ertyu
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Re: Jobless claims in the US

Post by ertyu »

Not necessarily. 18% has been bandied about as a figure. Imo this is much more likely to be the sort of thing that's priced in and then the mkt rallies (or doesn't fall) because reality came in less bad than expected.

Gilberto de Piento
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Re: Jobless claims in the US

Post by Gilberto de Piento »

I saw an article this morning that said the administration was trying too get authorities to talk about about the numbers in generalities rather than specific numbers to not spook the market. I can't find it now though.

George the original one
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Re: Jobless claims in the US

Post by George the original one »

@Gilberto de Piento - I saw a mention of the same thing. Kind of too late when talking about Oregon as it's already been announced that unemployment claims jumped 3,200%.

George the original one
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Re: Jobless claims in the US

Post by George the original one »

Second hand source for NYT:
In an email Wednesday, the Labor Department told state officials they needed to hold off on releasing the exact number of unemployment claims they are receiving amid the accelerating COVID-19 coronavirus pandemic, The New York Times reports.
https://theweek.com/speedreads/903595/t ... nt-numbers

ertyu
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Re: Jobless claims in the US

Post by ertyu »

this reddit thread with people sharing their covid job loss stories is illustrative

https://www.reddit.com/r/AskReddit/comm ... isis_what/

@TWS thanks, fixed
Last edited by ertyu on Fri Mar 20, 2020 1:09 pm, edited 2 times in total.

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TheWanderingScholar
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Re: Jobless claims in the US

Post by TheWanderingScholar »

@etryu: Ummm....wrong link.

Michael_00005
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Re: Jobless claims in the US

Post by Michael_00005 »

A good chance there will be some good buy opportunities next week:

https://www.google.com/search?q=jobless ... e&ie=UTF-8

Lucky C
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Re: Jobless claims in the US

Post by Lucky C »

Goldman Sachs analysis expects an "off the charts" 2.25 million initial US jobless claims for the Thursday 3/26 print. That would be 3.4x the 2009 peak.
https://www.marketwatch.com/story/joble ... 2020-03-20

On Martin Enlund's Twitter (Global Chief FX Strategist at Nordea Markets, so his followers are people seriously into finance), he posted this poll 10 days ago: https://twitter.com/enlundm/status/1237662688597155840
36% of his followers expected a mild recession like in 2001, 28% expected severe 2008-style recession, 20% expected a depression, and 16% voted for Black Death.

He is redoing the poll today: https://twitter.com/enlundm/status/1241267855376736256
What a change in only the past 10 days! The poll will be open a couple more days but currently the top vote goes to depression at 36%, 2nd place deep recession at 34%, with the mild recession and black death extremes around 15% each. Clearly the bad news has been accelerating the past 10 days.

It's hard to imagine just one week of bad jobless claims with things going South so quickly! Maybe next week there will be another new estimate of 4 million new jobless claims for the following week!

Note that this bull market started in March 2009 when unemployment claims peaked. The market has been dropping for the past month before any bad employment data has come in. Employment is a lagging indicator so it is not usually a good idea to bet on a market drop when a bad unemployment report is expected. What would move the market more in the short term is if the unemployment report is a lot better or a lot worse than the X-million jump that's already expected.

ertyu
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Re: Jobless claims in the US

Post by ertyu »

What’s the chance they shut down the stock market before the report officially comes out

IlliniDave
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Re: Jobless claims in the US

Post by IlliniDave »

Stock market has circuit breakers so I think it's more likely it would get closed down mid-session. Short-term unemployment is going to surge through the roof. That should surprise no one, but panic will ensue anyway, I'm afraid. Seems like the plan is to lay the groundwork for the eventual recovery. Seems like a sound strategy although the devil is in the details and the details are still being worked on. Sounds like they are coalescing around cash to lower income households (fades out after $75K/yr individual and $150K/yr joint based on 2018 tax data) and loans for small businesses that will be forgiven if used to maintain payroll as the major points. But again, not finalized.

Lucky C
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Re: Jobless claims in the US

Post by Lucky C »

I took a look at the historic weekly initial claims data from FRED.

Sometimes the S&P500 bottoms before weekly initial claims peak, sometimes after. Weekly initial claims and daily S&P500 data near a market bottom is very noisy anyway. What is clear though is that a bear market bottom does not occur after one really bad week of initial unemployment claims. This makes sense because recessions last several months and employers often keep employees working for a while, until they can't.

The rate of change looks more useful for gauging a bear market bottom. Of course weekly rate of change is super noisy so you have to filter several weeks. Often initial claims are shown with a 4-week moving average, but for the change in initial claims you would want to filter further, to 2 or 3 months. With that long length of averaging applied, it would be too late to usefully time the bear market bottom if you wait until the peak has clearly passed. You'd miss out on some nice early bull market gains. However, once this filtered rate of change spikes up to a level only seen during recessions, that more closely coincides with bear market bottoms and may work as a good point in time to start getting back into the market. These are just general statements because there are only like 6 bear markets with unemployment data to look at.

Finally, if next week's data really is 2 million or so, that off-the-charts data will throw off any backtested trading strategies, even if averaging data from the past 2-3 months. So I don't know if there's any robust way to use unemployment data for trading with this unique situation playing out. If you want to avoid the potential for significant drawdowns, probably best to wait until the rate of change in unemployment claims has decreased for a few weeks and instead just risk missing out on the first few weeks of the next bull market.

ertyu
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Re: Jobless claims in the US

Post by ertyu »

Lucky C wrote:
Sun Mar 22, 2020 8:52 am
if next week's data really is 2 million or so, that off-the-charts data will throw off any backtested trading strategies, even if averaging data from the past 2-3 months.
would it choke the algos do you think? might cause a right mkt mess...

Lucky C
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Re: Jobless claims in the US

Post by Lucky C »

If the forecast is 2 million and the print is 2 million then there is no surprise.
I don't know what the forecast is currently and I don't know what to actually expect, except generally higher than this past week.

Lucky C
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Re: Jobless claims in the US

Post by Lucky C »

3 million this week and stock futures turn positive

Lucky C
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Re: Jobless claims in the US

Post by Lucky C »

Seems like there is a lot of optimism these job losses will be very temporary. That may be true for a lot of them, but for the majority...?

Does a record fast increase in unemployment really make a record fast recovery to low unemployment much easier to achieve? The previous record fast recovery started in October 1949 when unemployment was 7.9%. It took only 16 months to bring unemployment down around this cycle's low of 3.5%. Other recoveries do not come close to achieving such an improvement in so short a time.
https://fred.stlouisfed.org/series/UNRATE

Based on stock prices and commentary it seems like investors expect a recovery to play out over only a few months. If unemployment jumps to the 8%+ range then people really expect employment recovery to be maybe four or five times faster than the fastest one in history? Again I know many will be able to go back to their old employer but It takes a long time for a new economic cycle to gain momentum.

ertyu
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Re: Jobless claims in the US

Post by ertyu »

@Lucky, imo the market is reacting to the QE not to the jobless claims. Real life and fundamentals are being drowned out by all the printing. This is very worrying long-term. I am in cash now, but I fear that very soon that would not be a good idea at all.

Polp
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Re: Jobless claims in the US

Post by Polp »

https://assets.bwbx.io/images/users/iqj ... /-1x-1.png

That pictures is just really weird. Interesting times...

When the store can open again (that could be with extra precaution like face masks, maximum number of persons in a store etc) those people should be able to get their job back quite quickly. That's assuming that those store still exist then.

George the original one
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Re: Jobless claims in the US

Post by George the original one »

Polp wrote:
Thu Mar 26, 2020 4:37 pm
those people should be able to get their job back quite quickly. That's assuming that those store still exist then.
There will need to be a lot of confidence-building before investors will want to take on the travel industry. People are not going to want to take the risk of travel so lightly until they're re-assured COVID-19 is gone from their life.

chenda
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Re: Jobless claims in the US

Post by chenda »

I expect a lot of tourist industry jobs have permanently gone for the foreseeable future.

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